Cincinnati Financial Corporation has posted a net income of $534 million for the second quarter of 2023, a substantial rise compared with the $818 million net loss the company recorded in the second quarter of 2022.
The rise comes in addition to the company recognizing a $363 million second quarter 2023 after-tax increase in the fair value of equity securities still held.
Within its insurance segment, Cincinnati recorded a 97.6% property & casualty (P&C) combined ratio for Q2, compared to 103.2% from the prior year period.
At the same time, the firm posted $303 million P&C new business written premiums, representing an increase of 6%. Cincinnati noted that agencies appointed since the beginning of 2022 contributed $17 million or 6% of total new business written premiums.
Within Commercial Lines insurance, Cincinnati posted a $33 million underwriting profit, compared to last years $62 million loss.
Moreover, combined ratio for Commercial Lines insurance stood at 96.9%, compared to Q222’s 106.3%.
Cincinnati also saw a $97 million (103%) increase in non-GAAP operating income to $191 million, a significant rise from Q222’s $94 million.
Moving forward to Personal Lines insurance, the firm reported a $36 million underwriting loss, compared to a $49 million loss from the same period last year.
NWP for the segment stood at $629 million, a major increase from the previous year’s $510 million.
Combined ratio for Personal Lines insurance stood at 107.6%, compared to last year’s 112.1%.
Steven J. Johnston, chairman and chief executive officer, commented: “Non-GAAP operating income more than doubled compared with last year’s second quarter result. Higher insurance underwriting profits drove most of the improvement, supported by a 13% rise in income from our investment portfolio. Cash and invested assets reached $24.6 billion, reflecting higher valuations and new securities purchased with the healthy cash flow from our insurance operations.
“Recording an insurance underwriting profit of $47 million compared to a $52 million loss in last year’s second quarter, and a $10 million loss the first quarter of 2023, reflects our determination to stay disciplined in our efforts to segment accounts and to charge an appropriate price for each risk. Even as competition in the market heats up, we’ve managed commercial lines and excess and surplus lines price increases on average at a high-single-digit percentage rate, and personal lines average increases in the mid-single-digit percentage rates.”
He continued: “Storms continued to increase in frequency, impacting policyholders across the country. Our field claims teams and headquarters claims associates have been busy, responding to around 40 declared catastrophe events in the first half of 2023. I’m proud of their efforts as they brought compassion and expertise to our agents and policyholders, quickly resolving claims and helping affected communities to move forward.
“Weather-related catastrophes contributed approximately 12 points to both our second quarter combined ratio of 97.6% and first half combined ratio of 99.2%. While these combined ratio results are within our long-term target of 95% to 100%, we believe continuing to stick to our model and focusing on the basics of our business will sustain the momentum we’ve gained in the second quarter and improve results during the second half of the year.”
